Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
NZD/USD Jumps as GDP Beats Analyst Estimates

NZD/USD Jumps as GDP Beats Analyst Estimates

Varun Jaitly, Contributor

Share:

Talking Points:

  • New Zealand GDP beat analyst’s estimates at 0.7% Q/Q and 2.8% Y/Y
  • Health Care and Construction were the largest drivers of growth in Q1
  • RBNZ and New Zealand FinMin call for weaker Kiwi to aid exports

Having trouble trading the New Zealand Dollar? This may be why.

The New Zealand Dollar spiked higher today after the country’s GDP figures crossed the wires and beat analyst expectations. The NZD/USD rose with bond yields, as better than expected growth figures weighed on RBNZ rate cut expectations. New Zealand’s GDP quarter over quarter increased by 0.7 percent versus 0.5 expected, and year over year increased by 2.8 percent versus 2.6 expected and 2.3 prior. The major sectors cited for the better than expected growth figures were construction and health care, both up 4.9 percent and 2.7 percent respectively. Manufacturing however, was down 0.4 percent over the March 2016 quarter, due to decreased production of food, beverages and tobacco. An increase in manufacturing inventories did lead to a buildup of 183 million dollars in overall inventories.

Gross Domestic Expenditures also grew over the accounting period, fueled by increased activity in fixed assets and a pickup in household consumption. Fixed asset growth was mainly driven by investment in residential building and general construction activity. Household consumption showed increased spending in services, durable goods and non-durable goods. Exports of goods and services were lower this previous quarter by 1 percent. This data is also in line with recent statements by the Reserve Bank of New Zealand that sees the stronger New Zealand dollar as a detriment to exports. Due to this the RBNZ stated in their June monetary policy statement that “a lower New Zealand Dollar would raise tradables inflation”. Comments from New Zealand’s Finance minister’s address to parliament prior to the release echoed the RBNZ’s sentiments.

(Source: www.stats.govt.nz)

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES